Glossary definition

What is highly compensated?


Highly Compensated

An individual who either:

  • Owns more than 5% of the interest in the business at any time during the year or the preceding year, regardless of
    how much compensation that person earned or received.
  • For the preceding year, received compensation from the business of more than $120,000 for 2015, and, if the
    employer so chooses, was in the top 20% of employees when ranked by compensation.

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